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Rufina [12.5K]
3 years ago
7

A company borrows $25 000 to buy new equipment. The loan is to be repaid in five equal annual payments. If the interest rate is1

0%, how much are each of the payments? " $3 238 $6 595 $5 500 $6 222
Business
1 answer:
REY [17]3 years ago
7 0

Answer:

Each payment is of $6595

Explanation:

Amount borrowed by company= $25000

No. of installments = 5

Interest rate = 10%

We are supposed to find how much are each of the payments

Formula : Amount =I (\frac{1-\frac{1}{(1+r)^n}}{r})

I = installment

r = rate of interest

n = No. of installments

So, 25000 =I (\frac{1-\frac{1}{(1+0.1)^5}}{0.1})\\\frac{25000}{(\frac{1-\frac{1}{(1+0.1)^5}}{0.1})}=I\\6594.93=I

So, Each payment is of $6595

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All requirements solved

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